CORRECTED-UPDATE 6-Brent falls below as price rout rolls on

05 December 2014 03:24

CORRECTED-UPDATE 6-Brent falls below as price rout rolls on

(Corrects price in headline and lead to below $69 a barrel from
below $68)
* U.S. jobs data stronger than expected
* Saudi Arabia slashes January oil prices for Asia, U.S.
* Iraq exports boost to pressure 2015 oil market
* North Sea loading programmes fall for January
By Libby George
LONDON, Dec 5 (Reuters) - Brent crude slipped below $69 a
barrel on Friday, on track to finish the week below $70 a barrel
for the first time since 2010, as cuts to official selling
prices from Saudi Arabia added to recent pressure.
Prices remain near five-year lows as the market grapples
with oversupply due to the U.S. shale boom and the recent
decision by the Organization of Petroleum Exporting Countries
not to cut production.
Prices pared early losses after stronger-than-expected U.S.
employment data, while a slightly lower physical supply from the
programme that underpins the Brent crude benchmark in January
also provided support.
But analysts said the Saudi cuts to monthly prices for crude
it sells to the United States and Asia just a week after
blocking cuts to OPEC's output show it is stepping up its battle
for market share.
"It's been weighing on the market, showing that OPEC is not
ready to end its price war," said Commerzbank analyst Eugen
Weinberg. "The lower the better seems to be the new paradigm for
OPEC."
The January Brent crude contract fell by 83 cents to
$68.81 a barrel by 1506 GMT, on track for the ninth loss in 10
weeks. U.S. crude was down 90 cents at $65.90.
U.S. employment data showing non-farm payrolls rising by
321,000 jobs last month, above expectations of an additional
230,000 jobs, contrasts with the euro zone, where Germany's
Bundesbank this week halved its 2015 growth forecasts for
Europe's largest economy to 1 percent.
At the same time, oversupply could rise next year when Iraq
starts to export more oil as a result of an agreement between
Baghdad and the Kurdish regional government.
Libya is also set to restart its largest oilfield, El
Sharara, once a pipeline blockage is cleared.
The combined pressure is preventing Brent from rebounding
from a near 13-percent plunge last week.
The fall may put global oil and gas exploration projects
worth more than $150 billion on hold next year, potentially
curbing supply by the end of the decade.
Fatih Birol, chief economist with the International Energy
Agency, said on Friday he sees oil prices rising to near $100 a
barrel in the coming years. Analysts also expect oil prices to
rebound in the next two years, averaging $82.50 a barrel in
2015, a Reuters poll showed.
(Additional reporting by Ahmed Aboulenein in London and
Florence Tan and Manolo Serapio Jr. in Singapore; Editing by
Jason Neely and Mark Potter)